October 17, 2012--Untaxing

We are about two weeks from having to move out of this place and head for our apartment in Manhattan. Unless the water is turned off the pipes begin to freeze in early November and thus we have no choice.

I should be the last person to be in any way cranky about our privileged reality, but when it come to some things about New York City I can't resist. In this case, real estate taxes.

The New York Times has been reporting about how the ultra-super rich who are gobbling up $20-plus million-dollar condos in the City are paying much less per square foot in real estate taxes than we are in our modest coop.

Developers are making deals with the City to help billionaires get away with this.

Some numbers--

At 15 Central Park West, for example, where apartments go for upwards of $20 million, owners are taxed at a square foot evaluation of only $332 though the average actual price paid by them is $7,813 per square foot.

This means that at 15 CPW, where a Russian oligarch bought his 20-something daughter an apartment for $88 million--she (or he) pays "only" $59,000 annually in real estate taxes whereas if they were charged the normal going rate the tax bill would be $686,000.

The City's justification for this tax largess is that to receive this break the developer is required to build some low-cost housing. As my father used to say--Don't hold your breath.

Also, city fathers and their real estate mogul funders trot out the "job-creator" argument in support of these tax loopholes. At another super-luxury project, One57, a 1,000 foot-tall, 90-story building that is right across from Carnegie Hall, which as it rises from the ground is putting the historic Hall and nearby Central Park in permanent shadows, it is claimed that 1,000 construction jobs have been created and the building, when completed and occupied, will ultimately employ hundreds in permanent jobs.

Two apartments at the still-incomplete One57 have already been sold for more than $90 million each. Does anyone believe that a major reason they were purchased sight unseen is because those who bought them did so because of low real estate taxes? Or that the project wouldn't have proceeded in the first place if it hadn't been for the tax breaks?

In the meantime, as the Times reports, by cutting these sweetheart deals for the wealthy everyone else in the City who owns property has to make up the difference in their own real estate taxes.

Maybe, after all, we should look into insulating this place so the pipes won't freeze and we can . . .